Deck 13: Strategic Entrepreneurship

Question 1

Joseph Schumpeter argued that firms engage in three types of innovative activities: imitation, invention, and innovation.

Answer 1

True

Question 2

Research has shown that internationally diversified firms are generally more innovative.

Answer 2

True

Question 3

Entrepreneurship is the economic engine driving many nations' economies in the global competitive landscape.

Answer 3

True

Question 4

Corporate entrepreneurship describes the opportunity seeking and exploitation of innovations in new start-up enterprises.

Question 5

The entrepreneurial mind-set is found primarily among managerial and scientific employees.

Question 6

Entrepreneurial opportunities exist because of competitive imperfections in markets and among the factors of production used to produce them or because they were independently developed by entrepreneurs.

Question 7

An organization engaging in strategic entrepreneurship focuses on identifying opportunities that it can exploit through innovations.

Question 8

As a process, entrepreneurship results in the "creative destruction" of existing products (goods or services) or methods of producing them and replaces them with new products and production methods.

Question 9

Evidence demonstrates that large established firms with well-funded R&D operations are more effective at innovation than are smaller or younger firms.

Question 10

The essence of entrepreneurship is to capture most of the existing markets from less aggressive and innovative competitors.

Question 11

If the company's workers have scant existing knowledge, their "absorptive capacity" to learn new knowledge will be limited.

Question 12

Innovation is the means by which the entrepreneur creates wealth.

Question 13

For firms to be entrepreneurial, they must stress individualism in their employees above all other characteristics.

Question 14

Entrepreneurial opportunities are conditions in which new goods or services can satisfy a need in the market.

Question 15

Bill Kroganski is the owner of a moderately successful industrial services firm.His reaction to the introduction of a new process technology that could be a direct competitor to the process his firm utilizes is fear.He spends his time considering ways to isolate his firm from this new technology.Bill has characteristics consistent with the entrepreneurial mind-set.

Question 16

Most large, complex firms innovate through cooperative strategies or strategic alliances, but not through internal activities.

Question 17

In order to be successful, a new entrepreneurial enterprise should be sheltered from the global environment until it is firmly established in domestic markets.

Question 18

A society's cultural characteristics influence a nation's rate of entrepreneurship and its related practices.

Question 19

Rosalie has become totally preoccupied with her idea for creating a business leasing horses to riders on the same principle as time-shares on condominiums.Rosalie is researching the legal, financial, and insurance aspects of her idea and is preparing a prospectus to take to banks to ask for a business loan.Rosalie's significant other is complaining that she "sleeps, eats, and drinks" this concept.Rosalie has the entrepreneurial characteristic of passion.

Question 20

AbieTech developed a new process for manufacturing its components.EfGee Manufacturing and HiGear quickly adopted a similar process.EfGee and HiGear were involved in invention.

Question 21

Firms develop innovation in all of the following ways EXCEPT:

A) through autonomous or induced strategic behavior.
B) by acquiring other companies.
C) through cooperative strategies.
D) via divestiture of low-performing units.

Question 22

Amazon's Dash button allows customers to reorder household essentials at the click of a button.This is an example of a radical innovation that provided significant technological changes.

Question 23

Acquisitions are a means of extending the company's product line and increasing revenues.The capital market values growth.Therefore, some firms make acquisitions to improve their standing in the capital markets.

Question 24

Acquisitions are a low-risk approach to producing and managing innovation.

Question 25

A product champion should come from outside the organization in order to ensure that the entrepreneurial vision has the objective support it needs.

Question 26

Innovations can only be produced by actions and activities within the firm.

Question 27

A company with a need for immediate, large returns should invest in research and development.

Question 28

While smaller firms must use cooperative strategies as a means of producing innovations, larger firms with large R&D units such as P&G and 3M can produce most if not all innovations internally.

Question 29

Cross-functional work teams are best supported by vertical organizational structures.

Question 30

Most innovations are incremental, not novel.

Question 31

Entrepreneurial ventures often produce more breakthrough innovations than do larger, more established organizations.

Question 32

Autonomous strategic behavior results in internal innovations that are highly consistent with the firm's current strategy.

Question 33

An innovation developed through autonomous strategic behavior will probably take the firm into new markets not addressed by its current strategy.

Question 34

A key risk of acquisitions is that a firm may substitute an ability to buy innovations for an ability to produce innovations internally.

Question 35

Political activity that is centered on the allocation of resources to the different functions may limit the effective use of cross-functional teams.

Question 36

An entrepreneurial mind-set, cross-functional product development teams, and shared values/leadership are ways that firms implement internal innovations.

Question 37

Larger, established firms, increasingly those competing globally, use their R&D labs to create disruptive technologies and products.

Question 38

While both incremental and novel innovations can create value, incremental innovations have the potential to contribute more significantly to a firm's efforts to earn above-average returns.

Question 39

Induced strategic behavior does not result in true innovation because it is a top-down process rather than a bottom-up process.

Question 40

FutureTech used an induced approach to innovation to create open innovation because it wants to be the firm whose products become the source of industry standards.

Question 41

GreenBox, a company that recycles paper products to make cardboard cartons, has introduced a new product that resists damage by moisture.GreenBox can expect that:

A) this innovation will resist competitors' attempts to imitate it.
B) its investors will react positively to the introduction of the new product because of the potential for higher returns.
C) its investors will react negatively because of the risk and cost entailed in introducing a new product.
D) this will be recognized in the industry as a radical innovation.

Question 42

Entrepreneurship is the process by which individuals or groups identify and pursue __________ without being immediately constrained by the __________ they currently control.

A) opportunities; resources
B) opportunities; core competencies
C) threats; resources
D) threats; core competencies

Question 43

__________ are individuals, acting independently or as part of an organization, who perceive an entrepreneurial opportunity and then take risks to develop an innovation and exploit it.

A) Leaders
B) Innovators
C) Entrepreneurs
D) Transformative leaders

Question 44

3M's Cubitron II, described as "an industrial abrasive that cuts faster, lasts longer, sharpens itself, and requires less elbow grease than any other abrasive on the market," is an example of a(n):

A) imitation of a competitor's product.
B) novel innovation.
C) incremental innovation.
D) innovation created through a cooperative strategy.

Question 45

Innovation creates a(n):

A) opportunity for a new product or process.
B) new product or process.
C) commercial product.
D) idea for potential exploitation.

Question 46

Because it replaces existing products and methods of production, entrepreneurship is a process of:

A) harnessing human potential.
B) creative destruction.
C) creation of opportunity.
D) exploitation of innovation.

Question 47

The three types of innovative activity include all of the following EXCEPT:

A) invention.
B) imitation.
C) implementation.
D) innovation.

Question 48

The use or application of entrepreneurship within an established firm is called:

A) corporate emergence.
B) transformational leadership.
C) exceptional R&D.
D) corporate entrepreneurship.

Question 49

Knowledge must be transferred to others in the firm to enhance the entrepreneurial competence of the firm.This requires that:

A) the receiving party has adequate absorptive capacity to learn.
B) the communication process be highly intensive.
C) the knowledge be broken into the smallest comprehensible units.
D) training consultants be involved in every step of transference.

Question 50

According to Peter Drucker, the primary goal of innovation is to:

A) promote social well-being.
B) increase the number of jobs.
C) create wealth.
D) support national economies.

Question 51

The number of patents held by an organization is a rough guide to the:

A) effective use of organizational politics.
B) future success of an initial public offering.
C) amount of venture capital a firm will be able to attract.
D) level of innovation in a firm.

Question 52

Entrepreneurs tend to have all the following characteristics EXCEPT:

A) a willingness to take responsibility for projects.
B) passion.
C) a preference for certainly about projects.
D) optimism.

Question 53

If the firm's current employees are well-trained in their jobs, but also have the ability to understand and apply new knowledge, these employees have:

A) social capital.
B) entrepreneurial capabilities.
C) high absorptive capacity to learn.
D) intellectual slack.

Question 54

Pet Care Companion Connection (PCCC) is an organization that trains persons with mild-to-moderate mental disabilities to care for pets in a pet boarding facility.This organization has been successful in providing a quality service for pet owners and a supportive training environment for their trainees.The tuition charged to trainees is only somewhat higher than the fee, which day-care providers would charge for these individuals.Graduates of the program are qualified for employment by commercial kennels.PCCC is an example of:

A) taking advantage of a need in the marketplace.
B) creative destruction of existing services for pet boarding.
C) institutionalized entrepreneurship.
D) internal corporate venturing.

Question 55

Isidore Security Services is a national provider of guard and security services for businesses.It has been in business for over 90 years, having been founded by one of Teddy Roosevelt's Rough Riders (Isidore O'Malley).Lately, it has been losing clients to more aggressive and innovative firms offering remote security monitoring systems instead of a guard-based approach.The board of directors of Isidore Security Services is concerned that this downward trend may threaten the existence of this venerable firm and the jobs of its employees.Which of the following statements is true?

A) This is an example of an established firm neglecting the opportunity-seeking aspect of strategic entrepreneurship.
B) This example shows the dysfunctional aspects of unrestricted entrepreneurialism.
C) This is an example of the lack of human capital hampering internal innovation.
D) Isidore Security Services is suffering from the "novelty effect" wherein new firms are more attractive to clients/customers merely because they are new and not because they add value.

Question 56

Products developed through __________ are often offered at lower prices without as many features as products developed through __________.

A) innovation; imitation
B) imitation; invention
C) imitation; innovation
D) innovation; invention

Question 57

BerEdel Group (BEG) is an international diversified firm.Marchers operates in the same industry and is also diversified, but only domestically.Which of the following would you expect?

A) BEG is less profitable than Marchers.
B) BEG is more innovative than Marchers.
C) BEG is less technologically advanced than Marchers.
D) BEG is more likely to have an individualistic culture than Marchers.

Question 58

Roland has developed and patented an inexpensive and organic way to enhance the fertility of clay soils without the addition of chemical fertilizers.Established agricultural chemical companies have rejected his proposals.After six months of promoting his invention during his time off from his regular job, Roland has decided to set his dream aside.Roland lacks a key characteristic of successful entrepreneurs, which is:

A) the ability to identify opportunities.
B) a corporate sponsor.
C) financial slack.
D) passion for his invention.

Question 59

The risks of international entrepreneurship include all of the following EXCEPT:

A) unstable foreign currencies.
B) problems with market efficiencies.
C) limitations on market size.
D) strong "buy-domestic" programs.

Question 60

__________ exist(s) when there is a need in the market that can be satisfied by new goods or services.

A) Potentiality
B) Market readiness
C) Entrepreneurial opportunities
D) Critical core competencies

Question 61

ValTek engages in international entrepreneurship.In contrast to a company that is involved only in domestic entrepreneurship, ValTek must concentrate more on:

A) balancing individual initiative and cooperative behaviors.
B) rewarding individual initiative.
C) building the capabilities to innovate and acquiring resources to make strategic decisions.
D) promoting activities that build collectivism within its human and social capital.

Question 62

WayWard Products has a deliberate strategy to encourage internal innovations.It has established processes to support autonomous strategic behavior as well as induced strategic behavior.WayWard Products is involved in:

A) entrepreneurial incubation.
B) creative destruction.
C) internal corporate venturing.
D) cooperative innovation strategies.

Question 63

Panera Bread has innovated to improve the quality of its distribution system, to improve the quality of its bread dough, and to introduce new menu items.These are examples of:

A) incremental innovation.
B) invention.
C) imitation.
D) the use of social capital.

Question 64

QuadroVax is investing heavily in research and development on new methods of vaccine development that would speed up the creation of vaccines for newly emerging viruses and to get these vaccines to the market rapidly.QuadroVax's shareholders can expect:

A) immediate wealth creation.
B) a long wait for an uncertain payoff.
C) a long wait for a high probability payoff.
D) a large payoff in the short term with rapidly decreasing wealth generation in the longer run.

Question 65

AgroPharm is searching for a top-level executive.AgroPharm has marketed its products only to U.S.farmers and agribusinesses in the past.Now, the company plans to expand operations to Mexico and Central America in the next two years.To maximize the chances of success, it is critical that the new executive:

A) be of Hispanic descent.
B) have international experience.
C) possess an advanced degree in animal science.
D) have a background in managing agribusiness firms.

Question 66

The development of the original personal computer (PC) was a(n) __________ innovation at the time, whereas adding a different kind of whitening agent to a soap detergent is an example of a(n) __________ innovation.

A) incremental; novel
B) novel; incremental
C) concentric; novel
D) novel; concentric

Question 67

Why do entrepreneurial ventures tend to produce more radical innovations than larger, more established firms do?

A) They have fewer resources.
B) They have more strategic flexibility.
C) Thy have more slack.
D) They have less slack.

Question 68

Innovations that involve significant technological breakthroughs and create new knowledge:

A) build incrementally on the firm's existing technologies and knowledge.
B) are the most common type of innovation.
C) involve substantial uncertainty and risk.
D) typically have clear market opportunities.

Question 69

One of the distinguishing differences between the two sources of internal corporate venturing (autonomous strategic behavior and induced strategic behavior) is whether the innovation process:

A) is encouraged through a bottom-up or top-down process.
B) is encouraged by a product champion or an entrepreneur external to the organization.
C) relies on internal structure or existing strategy to encourage innovation.
D) is in a large or small organization.

Question 70

The idea that it is necessary to sell the ideas to others in the organization so that innovations will be commercialized is the rationale behind the use of:

A) product champions.
B) joint ventures.
C) strategic leadership.
D) cross-functional teams.

Question 71

Research suggests that __________ is needed to encourage entrepreneurial behavior.Two surveys were conducted in 2017 to identify the world's 10 most entrepreneurial or innovative countries.Why weren't all of the same countries on both lists?

A) Entrepreneurship and innovation have two very different definitions.
B) Knowing the criteria to use in this identification is difficult.
C) The researchers conducting the studies were biased.
D) The studies were conducted throughout the year, and conditions changed.

Question 72

A negative effect of acquiring other firms for the purpose of innovation is:

A) innovations cannot be transferred between organizations.
B) the effect it can have on the firm's own ability to produce innovations.
C) innovations may not actually be present in the firm after the purchase is completed.
D) the acquired firm's employees usually leave.

Question 73

A successful __________ innovation will be less risky but less profitable than a successful __________ innovation.

A) incremental; novel
B) novel; incremental
C) alliance-generated; acquisition-generated
D) acquisition-generated; alliance-generated

Question 74

__________ is one reason for the different rates of entrepreneurship among countries across the globe.

A) Climate
B) Competitiveness
C) Culture
D) Constitution

Question 75

The new abrasive, Cubitron II, was developed through cooperative relationships among 3M business units.As such, Cubitron II is an example of:

A) the use of autonomous strategic behavior.
B) the use of induced strategic behavior.
C) the development of novel innovations.
D) innovation through acquisitions.

Question 76

Charles is a customer service representative for a home improvement store.He has creative ideas about how to increase customer satisfaction.Charles's talents will MOST likely be used in a firm that:

A) uses the induced strategic behavior form of internal corporate venturing.
B) uses the autonomous strategic behavior form of internal corporate venturing.
C) makes significant investment in research and development.
D) focuses on an acquisition strategy for gaining innovative ideas.

Question 77

The level of entrepreneurial activity in a nation is __________ the nation's level of economic productivity.

A) negatively related to
B) independent of
C) positively related to
D) weakly related to

Question 78

Autonomous strategic behavior is a(n) __________ process in which product champions pursue new ideas.

A) top-down
B) horizontal
C) integrated
D) bottom-up

Question 79

__________ involves internally developed incremental and novel innovations that result from deliberate efforts.

A) Internal corporate venturing
B) Autonomous strategic behaviors
C) Bottom-up strategic behaviors
D) Product championing

Question 80

Internal corporate venturing does NOT involve:

A) autonomous strategic behavior.
B) induced strategic behavior.
C) strategic alliances.
D) product champions.